NEW YORK–Student-loan delinquencies surged during 2018, hitting consecutive records of $166.3 billion in the third quarter and $166.4 billion in the fourth, according to a new analysis.
Bloomberg said it calculated the dollar amounts from the Federal Reserve Bank of New York’s quarterly household-debt report, which includes only the total owed and the percentage delinquent at least 90 days or in default, to arrive at the numbers.
“That percentage has remained around 11% since mid-2012, but the total increased to a record $1.46 trillion by December 2018, and unpaid student debt also rose to the highest ever,” Bloomberg said. “Delinquencies continued to climb even as the unemployment rate fell below 4%, suggesting the strong U.S. job market hasn’t generated enough wage growth to help some people manage their outstanding obligations.”
According to Bloomberg, the total in arrears is about twice the amount the U.S. Treasury provided to bail out the auto industry during the last recession.
Loans at least 90 days past due are considered to be in “serious delinquency.’’
“The age group transitioning into this category at the fastest pace is 40-to-49 year olds; that’s partly because of parents borrowing to pay their children’s expenses,” Bloomberg stated.